Apartment prices remain flat due to new stock entering the market.
Apartment prices remain flat due to new stock . Rental rates of villas have stabilised and are similar to 2007 levels . (SUPPLIED)
Occupancy levels are running at between 60 and 75 per cent across The Palm Jumeirah’s villas and apartments, according to realtors.
“Occupancy for villas is about 60 per cent while for the Shoreline Apartments, it is currently about 75 per cent,” said Laura Adams, Manager of Residential Sales and Leasing at the head office of Better Homes. “Only about 30 per cent of the people who were living on the Palm moved out because of the economic crisis.”
Mohanad Alwadiya, Managing Director of Harbor Real Estate, said: “According to our estimates, 70 to 75 per cent of the new handovers that happened last year are occupied. We estimate that about 70 to 75 per cent of all the villas and apartments are occupied as well.”
Villa prices on the man-made island have risen by 17 per cent since the middle of 2009, said realtors.
Adams said: “Villa prices appreciated by about Dh300 per sq ft, a 17 per cent increase from the low point in the middle of 2009. Overall sales have still not reached the levels seen in the third and fourth quarters of 2008. Apartment prices remain flat at best – the new stock in the Golden Mile, Tiara Residences, Oceana and Marina Residences is continuing to keep prices down and will do so for some time.”
She said prices for one-beds averaged about Dh1,100 to Dh1,500 per sq ft, and two-beds were about Dh1,000 to Dh1,700 per sq ft. Three-beds averaged about Dh950 to Dh1,500 per sq ft, while four-bed villas were about Dh1,600 per sq ft. Five to six-bedroom villas cost Dh1,900 per sq ft.
“The figures are broad as they include off-plan units in the Golden Mile and Marina Residences. Generally, completed properties such as Shoreline and the recently handed over Golden Mile units with superior views command higher prices.” she added.
Turning to rentals, Adams said a one-bedroom apartment currently costs between Dh100,000 and Dh150,000 per annum.
“Two-bedroom apartments range from Dh130,000 to Dh180,000 per year while three-bedroom apartments range between Dh160,000 and Dh200,000.
Four-bedroom apartments are available from Dh300,000 to Dh450,000 per annum and five-bedroom apartments range from Dh420,000 to Dh600,000.
Six-bedroom apartments are in the region of Dh600,000 to Dh700,000 per annum. For villas, rentals are about Dh280,000 per annum at Canal Cove, Dh350,000 for a garden home and Dh480,000 for a signature villa. In general, villa rates have stabilised and are similar to 2007 rates.”
Alwadiya said the current rental prices for apartments are about Dh90,000 per year for a one-bed, Dh130,000 for a two-bed, Dh160,000 for a three-bed and Dh250,000 for a four-bed.
“The Palm Jumeirah is one of the few projects in Dubai that managed to weather the economic crisis well, though villa prices witnessed a drastic decrease in the first and second quarters of 2009.
“For example, a garden home that was being sold for about Dh11m in 2008 suddenly fell to Dh7m. But in the third quarter of last year, the prices of villas started to pick up again and now the same garden home would not be offered for less than Dh9m.”
According to Better Homes, the Palm has a mix of end-users and investors, with declining rental yields tilting the balance in favour of the former. Adams said: “High maintenance fees are affecting net rental yields and since there are other options available elsewhere in Dubai this could impact interest in The Palm Jumeirah. Nationalities are mixed, but residents are mainly East European or Asian.”
Alwadiya said: “The buyer profile used to be dominated by GCC nationals, Russians and South Asians but now you find many different nationalities.”
He said that maintenance charges on the Palm apartments were in the range of Dh14 to Dh17 per sq ft.
“Charges for villas on the Palm are among the highest at about Dh4 to Dh5 per sq ft,” he said. “In effect, the owner of a two-bedroom apartment of about 1,800 sq ft will need to pay about Dh28,800 annually, assuming the charges do not increase yearly.”
First monorail in the Middle East
The Palm Monorail, which was inaugurated in April 2009, was the first monorail project to be constructed in the Middle East, says Nakheel.
It was developed by a consortium of leading international companies. The track runs between Gateway Station at the trunk of the Palm and Atlantis Aquaventure Station on the crescent.
It will eventually be linked to the Dubai Metro following the introd-uction of the Roads and Transport Authority’s Al Sufouh tramline, with direct links to Dubai International Airport and other key transport hubs.
Home to 12,000 residents
About 2,150 families are living in the Shoreline Apartments, said Nakheel, the Palm’s master developer. It added: “Around 800 families are living in the villas on the fronds. The villas, Shoreline Apartments and Marina Residences, are the only homes developed by Nakheel on The Palm Jumeirah. The rest of the residential offerings are being developed by third-party developers,” said a company spokesperson.
The Marina Residences complex at the tip of the Palm’s trunk consists of six towers with 940 apartments and penthouses. A further 40 townhouses stand on a marina-fronted promenade.
Mohanad Alwadiya, Managing Director of Harbor Real Estate, said four residential projects were handed over last year – Tiara Residences, Oceana, Marina Residences and the Golden Mile.
He said 644 Tiara apartments and penthouses were delivered last year and six freehold luxury residential buildings with 858 apartments and 12 penthouses were handed over at Marina Residences. The marina development also includes 30 townhouses.
The Golden Mile Residences project comprising 10 waterfront buildings, and 780 freehold apartments – ranging from one-bedroom units to penthouses and townhouses – were delivered last year. Apartments and penthouses at Oceana’s seven buildings are now being handed over.
The Nakheel official said: “The Palm Jumeirah is now home to more than 12,000 residents and this figure is set to rise as more and more take up occupancy at the island’s various residential developments. There are approximately 1,500 villas on the fronds.”
Nakheel says the Palm has attracted buyers from Chile to China and New York to Nepal, with the first residents moving into the 4,000 villas and apartments completed at the end of 2006.